The 2018 session of the Illinois Gen. Assembly has passed an amendment to Section 8.2 of the Illinois Workers' Compensation Act that effects changes in the payment of medical bills and interest thereon. Senate Bill 904, Public Act 100-1117, was passed over the veto of Gov. Rauner.
This bill amends Section 8.2 which provides for the medical fee schedule. It clarifies payment of medical bills and enables medical providers to sue employers to collect interest payments due on medical bills. Subsection (d) is amended to provide, in part:
The employer or its designee shall make payment for treatment in accordance with the provisions of this Section directly to the provider, except that, if a provider has designated a third-party billing entity to bill on his behalf, payment shall be made directly to the billing entity.
This is a helpful clarification. In the past decisions would sometimes be written that medical bills should be paid to providers and in other circumstances would be written that the amount due on the bill should be paid to the employee. Usually employees would be satisfied so long as the bills were paid but occasionally employees and their attorneys would insist that the payment be made to the petitioner. The motivation was likely either that the attorney could take a fee from the medical provider out of the proceeds and might even negotiate a discount on the bills that could be retained by the employee. This amendment makes clear that the bills are to be paid directly to the medical provider.
Subsection (d) (1) continues to provide:
All payments to providers for treatment provided pursuant to this Act shall be made within 30 days of receipt of the bills so long as the bill contains substantially all the required data elements necessary to adjudicate the bill.
Adjudicate means that there is sufficient information for the arbitrator or Commission to rule on whether or not the bills are compensable. It does not require that the bills be in a form that can be processed by the employer or insurer’s payment system.
An amendment to subsection (d) (2) provides:
If the bill does not contain substantially all the required data elements necessary to adjudicate the bill, or the claim is denied for any other reason, in whole or in part, the employer or insurer shall provide written notification to the provider in the form of an explanation of benefits displaying the basis for the denial and describing any additional necessary data elements within 30 days of the receipt of the bill.
An amendment to subsection (d) (3) provides:
In the case of (i) of nonpayment of provider within 30 days of receipt of the bill which contains substantially all the required data elements necessary to adjudicate the bill, (ii) of nonpayment to provider of a portion of the bill, or (iii) where the provider has not been issued an explanation of benefits for a bill, the bill, or portion of the bill up to the lesser of the actual charge or payment level set by the Commission in the fee schedule established by this section shall incur interest at a rate of 1% per month payable by the employer to the provider. Any required interest payment shall be made by the employer or its insurer no later than 30 days after payment of the bill.
(4) if the employer or its insurer fails to pay interest required pursuant to this subsection (d), the provider may bring an action in Circuit Court to enforce the provisions of this subsection (d) against the employer or its insurer responsible for ensuring the employer's liability pursuant to item (3) of subsection (c) of section 4. Interest under this subsection (d) is only payable to the provider. An employee is not responsible for the payment of interest under this section. The right to interest under this section (d) shall not delay, diminish, restrict or alter in a way the benefits to which the employee or his or her dependents are entitled under the Act.
This amendment applies to all services rendered on or after its effective date that we understand to be November 27, 2018,
The important takeaways for claims handlers are:
1) Payment of medical bills should be made within 30 days of receipt of the bills so long as the bill contains substantially all the required data elements necessary to adjudicate the bill.
2) Medical bills should be paid to the providers and not to the employees. If payment for a bill is made to the employee and the provider is not paid the employer and insurer are at risk of being liable to the provider for the interest due on the unpaid bill. A hold harmless agreement by which the employee and/or his attorney agrees to indemnify the employer for any interest it has to pay may give the employer rights against the employee and/or attorney but will not affect the medical providers’ rights against the employer/insurer.
3) Interest shall be 1% per month based on the amount due under the Fee Schedule or any contractual agreement between the employer and the provider, not on the amount billed.
4) If the bill is being denied as not containing substantially all the required data elements necessary to adjudicate the bill or any other reason, in whole or in part, the employer or insurer shall provide written notification to the provider in the form of an explanation of benefits displaying the basis for the denial and describing any additional necessary data elements within 30 days of the receipt of the bill. Failure to provide such notification will start the running of interest and permit the provider to file suit in Circuit Court to enforce its rights to interest. Elements necessary to adjudicate the bill are those necessary to enable the Commission to determine the compensability of the bill. Denial merely because the bill is in a form incompatible with the employer/insurer’s bill procession system may be deemed not to be an adequate explanation and may trigger the accrual of interest.
5) Handlers and employers should be alert to the possibility of receipt of service of process related to Circuit Court suits over interest.
For further information or with questions please contact an Evans & Dixon Illinois Workers’ Compensation attorney.